John Reese’s Synergy Global Entertainment is in serious trouble.
Early reports suggest the festival promoter is awash in $8.4 million worth of debt. Lawyers for the festival promoter have filed for Chapter 7 bankruptcy protection in California’s Central District bankruptcy court.
According to the filing, SGE owes nearly $9 million to creditors with only $1 million in assets. SGE only has $54,000 in liquid cash. The paperwork also reveals that SGE brought in nearly $17 million in gross revenue for the last eight months.
Reese was hoping to expand his sponsor-driven festival model in 2019. The company grew by more than 30% in 2018 with over $20 million in gross sales from its various festivals.
The most significant loss for SGE this year was the Disrupt Festival Tour and its 25-date list of stops. The summer event was headlined by Thrice, Sum 41, and The Used. SGE also ran into troubles with the cancellation of the Mad Decent Block Party Festival. That event was supposed to be headlined by Billie Eilish, Major Lazer, and Miguel.
In an interview with Billboard, Reese described the problems as being “hit by a perfect storm of adverse market conditions.”
He attributes a massive drop in ticket sales and a decline in revenue per ticket as significant factors. Reese says he felt like his troubles started in April and only worsened as the summer dragged on.
The Real Street festival in Anaheim was Reese’s last event. He has already quietly dissolved the company, and most SGE staff was picked up by Danny Wimmer Presents. SGE’s On the Water festival in Huntington Beach has also been canceled. Most SGE owned websites are also offline.
The filing says that SGE owes money to publicists, lawyers, vendors, and rental companies tied to the events. $500,000 in American Express charges were also racked up hosting the festivals. Front Gate Tickets and Groupon are both listed as creditors for “ticket refunds.”